Three backpack-laden children chattered happily as they trudged down a dirt path and disappeared into a patch of thorny brush along a highway.

Tucked around a corner, a woman named Twinkle Borge greeted the schoolkids from her metal folding chair. A seven-year-old girl tugging a red wagon full of water jugs paused to give Borge a kiss on the cheek. Then all three walked into their home: the largest homeless encampment in Hawaii.

Remarkably, some 200 people live there, and six infants were born there over the past year alone. Even in the state with the highest homelessness rate in the US, it draws attention. Yet while residents acclaim it as a novel community that incorporates ancient Hawaiian principles, it is now at risk of being swept away.

“We know from what we’ve seen in the past, once an encampment goes above a certain size, it becomes unmanageable,” said Scott Morishige, the governor’s coordinator on homelessness.

Borge might disagree. For 10 years she has served as leader of Pu’uhonua o Waianae, or the Refuge of Waianae, named for the local town about 30 miles from Honolulu. It covers almost 20 acres of state land adjacent to a boat harbor, and its swept dirt trails, lined with tents and pallets, lead to the ocean, where on summer days children and adults can often be found seeking relief from the heat.

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Unlike encampments on the streets of downtown Honolulu or Waikiki, the camp has a large number of families, with 45 children among them. And while other encampments across the islands are cleared away and their residents displaced at regular intervals, Borge’s encampment has endured, a fact that some credit to her leadership.

A stout Hawaiian woman, Borge first pitched camp near the boat harbor 13 years ago. At the time, she was heartbroken from a breakup, addicted to cocaine and haunted by the loss of her twins during pregnancy. But when her sister entrusted her with babysitting her nephew, she saw it as a second chance at motherhood and found the motivation to get clean. Ten sober years later, she has become a mother figure to hundreds of homeless people.

Many residents of her encampment have fallen through the safety net. Borge estimates that 40% have jobs but still can’t afford a home. A number have addictions or mental health challenges, and while nurses and social workers visit the camp once a week to provide basic health services, some need more intensive help. A few years ago, a man set himself on fire and almost died. On a recent afternoon, an elderly woman stopped by to say hello to Borge, began laughing and then broke down in tears. “Oh, come here, it’s gonna be OK,” said Borge as she embraced the woman and looked up at the trees.

Many residents of the encampment have fallen through the safety net. Photograph: Chapin Hall for the Guardian

Borge has been acclaimed by the Hawaiian legislature for “practicing pu’uhonua, one of Hawaii’s most valued ideologies”. Pu’uhonua is an ancient Hawaiian term for a place of refuge, or a sacred place where miscreants can find forgiveness and a clean slate.

Her Pu’uhonua camp has the flavor of a matriarchy, because out of the eight captains managing different areas, seven are women. Many consider those under their care to be their hanai babies, a term referring to an ancient Hawaiian practice of nourishing another person’s child. The women help residents with everything from settling fights to providing new clothes for job interviews.

“Some adults still need a momma, they still need that firm hand,” said Rose Loke Chung-Lono, who is considered second in command at the camp.

On a Thursday morning in May, Loke tapped on tents and woke up residents of her section for a monthly meeting to review rules. “We show pride in how we live,” she sternly called out over a crowd of 35 men, women and children. “When people come walking through, what they see is what you are.”

One woman raised her hand tentatively. “Where we gonna put the trash?” she asked.

It is a pressing question for both campers and state officials. Currently people in the neighboring town of Waianae help cart away garbage on the weekends, but they can’t always keep up with the mounding refuse.

Adding to the hygiene issues, the bathrooms in the adjacent park have been permanently closed. Campers use buckets as makeshift toilets, which they empty into two porta-potties nearby. Meanwhile, the Hawaii department of land and natural resources, which owns the land under the encampment, is considering shutting off water hoses in the area. Residents use them for drinking and showering, but the department’s water bill for the boat harbor area has doubled, soaring to more than $500,000 a year.

The women help residents with everything from settling fights to providing new clothes for job interviews. Photograph: Chapin Hall for the Guardian

Officials have resisted calls to fund hygiene facilities and trash pickup. They have a different plan for the encampment.

“The administration is focused on how we can get people into housing, that’s where we believe the best use of resources are,” Morishige said. Dozens have already been moved into homes, and the state is building 15 new units in the area.

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It is the state’s goal to clear the camp and house everyone. But this aspiration may be hard to realize: Hawaii has one of the toughest housing markets in the country, with more than one-quarter of properties snapped up by vacationers. According to a recent study, a Hawaii resident with a minimum-wage job would need to work 116 hours each week just to afford a one-bedroom apartment.

Amid this uncertainty, Borge is pushing a different solution.

Cities such as Seattle and Portland have popularized the concept of legal campgrounds for homeless people, and Hawaii lawmakers are considering a similar solution on the islands – with a local twist. The campsites would be known as Pu’uhonua safe zones, and Borge’s encampment would be the prototype.

“The way forward is to embrace their way of thinking,” said Andria Tupola, a state representative for the neighboring district. Tupola said the current camp is not sustainable or sanitary, but she supports finding a solution that would allow the campers to maintain the low-cost, communal style of living they desire. She is meeting with local landlords in hopes of securing a land lease, enabling Borge’s encampment to become a sustainable Pu’uhonua community.

Over the next year, a group of legislative analysts will assess the feasibility of allowing these safe zones. Opinions diverge. For some Hawaiian officials, normalizing the existence of encampments is a sign of failure – an admission that homelessness can never be eradicated. But for Borge, the stakes are quite different.

“This is my home,” Borge said. “If I had property, I would still want to stay in a tent. Even when I stay home with my dad, I sleep on the back porch. I guess maybe because I’m a –” she paused. “I don’t know. But for years, I’ve been like this.”

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